Flood Mitigation Assistance

FEDERAL EMERGENCY MANAGEMENT AGENCY

44 CFR Part 78

RIN 3067-AC45

Flood Mitigation Assistance

AGENCY: Federal Emergency Management Agency (FEMA).

ACTION: Interim final rule; request for comments.

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SUMMARY: This interim final rule implements Secs. 553 and 554 of the

National Flood Insurance Reform Act of 1994. Section 553 authorizes a

Mitigation Assistance Program, which authorizes FEMA to provide grants

to States and communities for planning assistance and for mitigation

projects that reduce the risk of flood damages to structures covered

under contracts for flood insurance. Section 554 establishes the

National Flood Mitigation Fund to fund assistance provided under

Sec. 553.

DATES: This interim final rule is effective April 29, 1997. We invite

comments on this interim final rule, which should be received by June

18, 1997.

ADDRESSES: Please send any comments to the Rules Docket Clerk, Office

of the General Counsel, Federal Emergency Management Agency, 500 C

Street SW., room 840, Washington, DC 20472, (facsimile) (202) 646-4536.

FOR FURTHER INFORMATION CONTACT: Robert F. Shea, Mitigation

Directorate, Federal Emergency Management Agency, 500 C Street SW.,

Washington, DC 20472, (202) 646-3619, (facsimile) (202) 646-3104.

SUPPLEMENTARY INFORMATION: The enactment of Title V of the Community

Development and Regulatory Reform Act, also known as the National Flood

Insurance Reform Act of 1994 (the Act), created significant

opportunities for mitigation. Section 553 of the Act, authorizes a

Mitigation Assistance Program which FEMA has designated Flood

Mitigation Assistance (FMA). Section 554 establishes the National Flood

Mitigation Fund to provide assistance under Sec. 553. These regulations

implement the requirements of Secs. 553 and 554 of the Act. FMA was

developed to address concerns regarding repetitively or substantially

damaged structures, or both, and the associated claims on the National

Flood Insurance Fund. The overall goal of FMA is to fund cost-effective

measures that reduce or eliminate the long-term risk of flood damage to

buildings, manufactured homes, and other insurable structures.

FEMA will ask the Governor of each State to identify a point of

contact (POC) for FMA. Each State, through the POC, will receive annual

funding for technical assistance and planning grants through the annual

Cooperative Agreements. States will distribute the planning grants at

their discretion, in accordance with the specified grant limitations.

The purpose of the planning grants is to develop or update a Flood

Mitigation Plan that FEMA must approve before approving a project

grant. In addition, States will be notified as to the allocation for

FMA project grants each year. States will solicit and evaluate project

applications, choosing those they wish to fund. The POC will review the

applications for completeness, basic eligibility, and consistency with

the approved Flood Mitigation Plan. The POC will forward these projects

to FEMA for final approval and funding through a supplement to the

annual Cooperative Agreement. All project applications, as well as

Flood Mitigation Plans, must go through the POC to be accepted by FEMA,

unless a State chooses not to coordinate the program. Alternative

procedures allowing for direct coordination with FEMA are available in

the following two circumstances. If a Governor chooses not to identify

a POC to coordinate the FMA, communities may submit applications and

plans directly to FEMA.

The regulations outline a basic planning process with minimum

standards for the Flood Mitigation Plans. Existing plans, such as those

credited through the Community Rating System or those prepared in

conformance with Sec. 409 of the Stafford Act, 42 U.S.C. 5176, may meet

the requirements of FMA with few or no modifications. The plan should

summarize the planning process, and should be reviewed periodically by

the community in order to remain a viable document. Flood Mitigation

Plans must be formally adopted by the legal entity submitting the plan

for FEMA approval.

All FMA projects must be consistent with the goals of FMA, that is,

to reduce the risk of flood damage to structures insured under the

National Flood Insurance Program (NFIP). Specifically, project

eligibility is dependent on two components: the type of activity must

be eligible (elevation, acquisition, etc.) and each project must meet a

set of minimum criteria (cost effectiveness, environmental

considerations, etc.).

The regulations address the need for States and communities to

maintain liaisons with other organizations and agencies to better

coordinate available programs. FMA strongly encourages

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States to maintain a multi-hazard interagency mitigation team or other

coordinating body. The regulations for FMA were developed to be

flexible enough to work with existing programs with complementary

goals. With the limited funds available in FMA and in other mitigation

programs, the ability to package programs will be important to

potential applicants.

FEMA used an open process in the development of these regulations,

coordinating with many of our constituent groups. Several forums were

held to help identify issues and approaches to implementing FMA, and

draft regulations were circulated for comment.

National Environmental Policy Act

An environmental review pursuant to the requirements of 44 CFR Part

10, Environmental Consideration, will be completed before publication

of the final rule.

Executive Order 12898, Environmental Justice

Review of the socioeconomic conditions relating to this interim

rule will be completed before publication of the final rule.

Executive Order 12866, Regulatory Planning and Review

This interim final rule is not a significant regulatory action

within the meaning of Sec. 2(f) of E.O. 12866 of September 30, 1993, 58

FR 51735, but attempts to adhere to the regulatory principles set forth

in E.O. 12866. The rule has not been reviewed by the Office of

Management and Budget under E.O. 12866.

P.L. 104-121, Congressional Review of Agency Rulemaking

This interim final rule is not a ``major rule'' within the meaning

of Sec. 804 of P.L. 104-121, Congressional Review of Agency Rulemaking.

FEMA has submitted a report to Congress summarizing the scope and

effect of the rule, as required by Sec. 801 of P.L.104-121.

Paperwork Reduction Act

A notice of the proposed information collections has been published

in the Federal Register requesting comments on the planning

requirements and other information collection instruments. FEMA will be

submitting an OMB clearance package to OMB after the comment period is

closed. Until OMB approval, FEMA cannot collect information under this

rule. This includes Flood Mitigation Plans, Project Grant applications,

and post-grant reports. FEMA will publish a Federal Register notice to

notify potential applicants of OMB's approval and implementation for

information collection purposes.

Executive Order 12612, Federalism

This interim final rule involves no policies that have federalism

implications under E.O. 12612, Federalism, dated October 26, 1987.

Executive Order 12778, Civil Justice Reform

This interim final rule meets the applicable standards of

Sec. 2(b)(2) of E.O. 12778.

List of Subjects in 44 CFR Part 78

Flood insurance, Flood mitigation assistance, Grant programs.

Accordingly, Chapter I, Subchapter B of Title 44 of the Code of

Federal Regulations is amended by adding Part 78 to read as follows:

PART 78--FLOOD MITIGATION ASSISTANCE

Sec.

78.1 Purpose.

78.2 Definitions.

78.3 Responsibilities.

78.4 Applicant eligibility.

78.5 Flood Mitigation Plan development.

78.6 Flood Mitigation Plan approval process.

78.7 Grant application procedures.

78.8 Grant funding limitations.

78.9 Planning grant approval process.

78.10 Project grant approval process.

78.11 Minimum project eligibility criteria.

78.12 Eligible types of projects.

78.13 Grant administration.

78.14 Alternative procedures.

Authority: 42 U.S.C. 4001 et seq.; 42 U.S.C. 4104c, 4104d;

Reorganization Plan No. 3 of 1978, 43 FR 41943, 3 CFR, 1978 Comp.,

p. 329; E.O. 12127 of Mar. 31, 1979, 44 FR 19367, 3 CFR, 1979 Comp.,

p. 376.

Sec. 78.1 Purpose.

(a) The purpose of this part is to prescribe actions, procedures,

and requirements for administration of the Flood Mitigation Assistance

(FMA) program, authorized by Sections 1366 and 1367 of the National

Flood Insurance Act of 1968, 42 U.S.C. 4104c and 4104d.

(b) The purpose of FMA is to assist State and local governments in

funding cost-effective actions that reduce or eliminate the long-term

risk of flood damage to buildings, manufactured homes, and other

insurable structures. The long-term goal of FMA is to reduce or

eliminate claims under the National Flood Insurance Program (NFIP)

through mitigation activities. The program provides cost-shared grants

for three purposes: Planning Grants to States and communities to assess

the flood risk and identify actions to reduce that risk; Project Grants

to execute measures to reduce flood losses; and Technical Assistance

Grants that States may use to assist communities to develop viable FMA

applications and implement FMA projects. FMA also outlines a process

for development and approval of Flood Mitigation Plans.

Sec. 78.2 Definitions.

(a) Except as otherwise provided in this part, the definitions set

forth in part 59 of this subchapter are applicable to this part.

(b) Community means

(1) A political subdivision, including any Indian tribe or

authorized tribal organization or Alaskan native village or authorized

native organization, that has zoning and building code jurisdiction

over a particular area having special flood hazards, and is

participating in the NFIP; or

(2) A political subdivision of a State, or other authority, that is

designated to develop and administer a mitigation plan by political

subdivisions, all of which meet the requirements of paragraph (b)(1) of

this section.

Sec. 78.3 Responsibilities.

(a) Federal. The Director will allocate available funds to each

FEMA Region. The FEMA Regional Director will:

(1) Allocate Technical Assistance and Planning Grants to each State

through the annual Cooperative Agreements;

(2) Approve Flood Mitigation Plans in accordance with Sec. 78.6;

and

(3) Award all FMA project grants, after evaluating applications for

minimum eligibility criteria and ensuring compliance with applicable

Federal laws.

(b) State. The State will serve as grantee through the State Point

of Contact (POC) designated by the Governor. The POC must have working

knowledge of NFIP goals and processes and will ensure that FMA is

coordinated with other mitigation activities at the State level. If a

Governor chooses not to identify a POC to coordinate the FMA,

communities may follow alternative procedures as described in

Sec. 78.14. States will:

(1) Provide technical assistance to communities to assist them in

developing applications and implementing approved applications;

(2) Award planning grants;

(3) Submit plans to the FEMA Regional Director for approval;

(4) Evaluate project applications, selecting projects to forward to

the FEMA Regional Director for final approval; and

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(5) Submit performance and financial reports to FEMA in compliance

with 44 CFR 13.40 and 13.41.

(c) Community. The community will:

(1) Complete and submit applications to the State POC for the

Planning and Projects Grants;

(2) Prepare and submit the Flood Mitigation Plan;

(3) Implement all approved projects;

(4) Comply with FMA requirements, 44 CFR parts 13 and 14, the grant

agreement, applicable Federal, State and local laws and regulations (as

applicable); and

(5) Account for the appropriate use of grant funds to the State

POC.

Sec. 78.4 Applicant eligibility.

(a) The State is eligible to apply for grants for Technical

Assistance.

(b) State agencies and communities are eligible to apply for

Planning and Project Grants and to act as subgrantee. Communities on

probation or suspended under 44 CFR part 60 of the NFIP are not

eligible. To be eligible for Project Grants, an eligible applicant will

develop, and have approved by the FEMA Regional Director, a Flood

Mitigation Plan in accordance with Sec. 78.5.

Sec. 78.5 Flood Mitigation Plan development.

A Flood Mitigation Plan will articulate a comprehensive strategy

for implementing technically feasible flood mitigation activities for

the area affected by the plan. At a minimum, plans will include the

following elements:

(a) Description of the planning process and public involvement.

Public involvement may include workshops, public meetings, or public

hearings.

(b) Description of the existing flood hazard and identification of

the flood risk, including estimates of the number and type of

structures at risk, repetitive loss properties, and the extent of flood

depth and damage potential.

(c) The applicant's floodplain management goals for the area

covered by the plan.

(d) Identification and evaluation of cost-effective and technically

feasible mitigation actions considered.

(e) Presentation of the strategy for reducing flood risks and

continued compliance with the NFIP, and procedures for ensuring

implementation, reviewing progress, and recommending revisions to the

plan.

(f) Documentation of formal plan adoption by the legal entity

submitting the plan (e.g., Governor, Mayor, County Executive).

Sec. 78.6 Flood Mitigation Plan approval process.

The State POC will forward all Flood Mitigation Plans to the FEMA

Regional Director for approval. The Regional Director will notify the

State POC of the approval or disapproval of the plan within 120 days

after submission. If the Regional Director does not approve a

mitigation plan, the Regional Director will notify the State POC of the

reasons for non-approval and offer suggestions for improvement.

Sec. 78.7 Grant application procedures.

States will apply for Technical Assistance and Planning Grants

through the annual Cooperative Agreement between FEMA and the State.

The State POC will be notified regarding their available funds for

project grants each fiscal year. The State may forward project

applications to FEMA for review at any time.

Sec. 78.8 Grant funding limitations.

(a) The Director will allocate the available funds for FMA each

fiscal year. Each State will receive a base amount of $10,000 for

Planning Grants and $100,000 for Project Grants, with the remaining

funds distributed based on the number of NFIP policies, repetitive loss

structures, and other such criteria as the Director may determine in

furtherance of the disaster resistant community concept.

(b) A maximum of $1,500,000 may be allocated for Planning Grants

nationally each fiscal year. A Planning Grant will not be awarded to a

State or community more than once every 5 years, and an individual

Planning Grant will not exceed $150,000 to any State agency applicant,

or $50,000 to any community applicant. The total Planning Grant made in

any fiscal year to any State, including all communities located in the

State, will not exceed $300,000.

(c) A maximum of ten percent of the funds available for Project

Grants will be allocated to Technical Assistance grants each fiscal

year.

(d) The total amount of FMA Project Grant funds provided during any

5-year period will not exceed $10,000,000 to any State or $3,300,000 to

any community. The total amount of Project Grant funds provided to any

State, including all communities located in the State will not exceed

$20,000,000 during any 5-year period.

Sec. 78.9 Planning grant approval process.

The State POC will evaluate and approve applications for Planning

Grants. Funds will be provided only for the flood portion of any

mitigation plan, and Planning Grants will not be awarded to develop new

or improved floodplain maps. The performance period for each Planning

Grant will not exceed 3 years.

Sec. 78.10 Project grant approval process.

The State POC will solicit applications from eligible applicants,

review projects for eligibility, and select applications for funding.

Those project applications will then be forwarded to FEMA for final

approval. FEMA will provide funding on a project by project basis

through a supplement to the annual Cooperative Agreement. The FEMA

Regional Director will notify States regarding the program schedule at

the beginning of each fiscal year.

Sec. 78.11 Minimum project eligibility criteria.

The identification of a project or activity in an approved Flood

Mitigation Plan does not mean it meets FMA eligibility criteria.

Projects must:

(a) Be cost-effective, not costing more than the anticipated value

of the reduction in both direct damages and subsequent negative impacts

to the area if future floods were to occur. Both costs and benefits are

computed on a net present value basis.

(b) Be in conformance with 44 CFR part 9, Floodplain Management and

Protection of Wetlands; Executive Order 12699, Seismic Safety of

Federal and Federally Assisted or Regulated New Building Construction;

44 CFR part 10, Environmental Considerations; and any applicable

environmental laws and regulations.

(c) Be technically feasible.

(d) Be in conformance with the minimum standards of the NFIP

Floodplain Management Regulations at 44 CFR part 60.

(e) Be in conformance with the Flood Mitigation Plan; the type of

project being proposed must be identified in the plan.

(f) Be located physically in a participating NFIP community that is

not on probation or must benefit such community directly by reducing

future flood damages.

Sec. 78.12 Eligible types of projects.

The following types of projects are eligible for funding through

FMA, providing they meet all other eligibility criteria.

(a) Acquisition of insured structures and underlying real property

in fee simple and easements restricting real property to open space

uses.

(b) Relocation of insured structures from acquired or restricted

real property to non hazard-prone sites.

(c) Demolition and removal of insured structures on acquired or

restricted real property.

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(d) Elevation of insured residential structures in accordance with

44 CFR 60.3.

(e) Elevation or dry floodproofing of insured non-residential

structures in accordance with 44 CFR 60.3.

(f) Other activities that bring an insured structure into

compliance with the floodplain management requirements at 44 CFR 60.3.

(g) Minor physical flood mitigation projects that reduce localized

flooding problems and do not duplicate the flood prevention activities

of other Federal agencies.

(h) Beach nourishment activities.

Sec. 78.13 Grant administration.

(a) FEMA may contribute up to 75 percent of the total eligible

costs of each grant. At least 25 percent of the total eligible costs

will be provided from a nonfederal source. Of this amount, not more

than one half will be provided from in-kind contributions. Allowable

costs will be governed by OMB Circular A-87 and 44 CFR part 13.

(b) The grantee must submit performance and financial reports to

FEMA and must ensure that all subgrantees are aware of their

responsibilities under 44 CFR parts 13 and 14.

(c) FEMA will recapture any funds provided to a State or a

community under FMA and deposit the amounts in the National Flood

Mitigation Fund if the applicant has not provided the appropriate

matching funds, the approved project has not been completed within the

timeframes specified in the grant agreement, or the completed project

does not meet the criteria specified in the regulations in this part.

Sec. 78.14 Alternative procedures.

For the purposes of this part, alternative procedures are available

which allow the community to coordinate directly with FEMA in

implementing the program. These alternative procedures are available in

the following circumstances. Native American tribes or authorized

tribal organizations may submit plans and applications to the State POC

or directly to the FEMA Regional Director. If a Governor chooses not to

identify a POC to coordinate the FMA, communities may also submit plans

and applications to the FEMA Regional Director.

Dated: March 13, 1997.

James L. Witt,

Director.

[FR Doc. 97-6910 Filed 3-19-97; 8:45 am]

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